ADVANTAGES & DISADVANTAGES
OF EQUITY RELEASE

Equity Release can make a huge difference to your retirement.

Whether that’s:-

Paying off any remaining mortgage or debts and enabling you to stay where you are or reduce your outgoings
Enjoying your leisure time more – possibly travelling the world or buying a holiday home.
Enabling you to make longed for home improvements or adaptations
Helping younger family members find a deposit for their first home

The choice is yours!

However, equity release is not necessarily right for everyone. So to help you assess whether it might be something you wish to consider, we have compiled a summary of the main advantages and disadvantages of equity release.

Advantages

Enables you to release some of your home’s value but live in your home for the rest of your life -rent free.
Under a Lifetime Mortgage you can choose to either pay the interest each month to avoid the debt increasing (Interest Only Lifetime Mortgages) or simply allow it to be continually added to the amount borrowed (“Roll Up” Lifetime Mortgage). Alternatively, under a Home Reversion plan you can sell some or all of your homes ownership to provide a lump sum of money without needing to pay any rent.
Any money released is TAX FREE.
The ‘no-negative equity guarantee‘ offered by all Equity Release Council approved schemes means you can be assured that any debt you create, plus any ongoing interest which you might elect to add to the amount borrowed, will never become more than the property’s future value when you die.

Disadvantages

Equity release schemes involve borrowing against your home, (or in the case of Home Reversion Plans – selling all or part of your home) and may work out more expensive in the long term than downsizing to a smaller property.
Equity release may affect your entitlement to state benefits and grants.
Releasing equity will reduce the value you have in your home and therefore the amount of inheritance you will be able to leave. It can also make the process of leaving your property to beneficiaries more difficult – especially in the case of a home reversion plan.
Should you wish to end the plan it may be difficult, and you may incur penalties to do so.

Equity Release reduces the value of your estate and may affect your entitlement to means tested benefits.

Before releasing any equity, it is important to understand the costs, features and risks and to request a personalised illustration.

Will Equity Release Be Right For You? Get Expert Help

Here at Equity Release Centre, we believe equity release should only be entered into after discussing all alternatives with an experienced Equity Release Council adviser who can look at all options for you, as well as discussing it with you and any family you wish to involve.

That’s where we can help. We will offer an initial consultation free of charge so both you and us can assess whether equity release might be suitable.

Book your free initial consultation today

Or call us on Freephone 0800 180 4883

We research and arrange the most suitable equity release or retirement mortgage for you from a wide range of lenders including: